Friday, December 14, 2007

Absolute value

BHP needed to sell its own value and prospects, relative to Rio, for at least three reasons. One was to ensure that whatever happens to the merger proposal the market didn't take on board some of Rio's assertions about the outlook for BHP. Another was the need to re-base the core argument that the proposal is about relative rather than absolute value. And yet another was the need to condition the market in its own shares and Rio's for the possibility that this could turn into a long game.